COMPREHENSIVE EXAMINATION OF DETERMINANTS INFLUENCING CAPITAL STRUCTURE AND STOCK RETURNS IN MINING COMPANIES LISTED ON THE INDONESIAN STOCK EXCHANGE (2013-2018)

Abstract

The capital market functions as an intermediary institution connecting entities in need of funds with those having surplus capital; therefore, the role of the capital market is crucial in supporting the economy of a country.In Indonesia, the mining sector is perceived to offer high returns for investors due to its competitive financial performance. Despite the decline in oil and coal prices from mid-2014 to 2016, the mining sector continued to be a key pillar of Indonesia's economy. In 2016, this industry notably contributed the largest non-tax revenue to the country. The population in this study consisted of 47 mining companies listed on the Indonesia Stock Exchange during the period 2013-2018. Sample selection was conducted using purposive sampling, resulting in 38 companies meeting the criteria from the initial 47.

The data analysis technique employed in this study utilized path analysis. The research findings indicate that asset structure and profitability positively influence capital structure, while capital structure and company size negatively influence capital structure. Asset structure and company size positively influence stock returns, whereas capital structure negatively influences stock returns.